The winning cocktail of the cognac houses
The industry is going through an incredible upturn. Its income is growing faster than its production. A success linked to the big houses and an unequalled marketing inventiveness in wines and spirits.
How far will cognac go? With 198 million bottles sold in 2017 (+10%), the profession is setting a series of records. It has established itself as a model sector for a French food and agricultural sector that is struggling in this era of globalization.
What is the reason for this success? In the first place, it is due to its ability to constantly enhance the value of the product. At the end of February, sales volumes jumped by a further 8% over the last twelve months, with turnover up 14% to 3.15 billion euros. 3.15 billion. "Production is subject to quotas. As a result, marketing has long since focused on value, not volume. With a strong intelligence around the creation of needs," analyses Sylvain Dadé, associate director of Sowine, a marketing consulting agency.
So much so that the XO quality cognac (at least 10 years old) sold for 20 euros per 50cl bottle at Lidl in February aroused the ire of producers. "We cannot bear to see supermarkets selling off a cognac, behind which there is know-how and a history", says Christophe Veral, president of the Union Générale des Viticulteurs (General Union of Winegrowers) for the AOC Cognac. "The place of cognac must remain in the premium, super-premium and iconic categories ", insists Jean-François Ley, founder of the Wine & Spirits Institute.
The vogue for "craft" cognac
The second factor of success is the weight of the four major houses in the sector: Hennessy (LVMH, owner of Les Echos), Martell (Pernod Ricard), Remy Martin (Cointreau) and Courvoisier (Suntory). They are the driving force behind the sector, capturing more than 80% of the market and driving the entire sector. Highly inventive in terms of marketing, they have played to the heart of African-Americans' taste for a drink, perceived as a symbol of wealth and refinement. In the 2000s, Hennessy began using the faces of great African-American artists such as Marvin Gaye and Erykah Badu in its advertising. The brand has also dug its furrow in the rappers' scene, where it appears in many successful titles: Drake in his hit "One Dance": "That's why I need a one dance, got a Hennesy in my hand", or Kanye West: "Cry, who needs sorry when there's Hennesy?".
The third key to success is inventiveness. The latest innovation to date is "craft" cognacs, playing on a notion of terroir and craftsmanship. The niche has been cleared by Francis Abecassis, a former Languedoc winegrower, at the head of more than 200 hectares. He is the one who, with his eye on whisky, has imposed the "single estate cognac" carried by his brands, ABK6, Leyrat and Reviseur.
Inventiveness or regulation?
Camus has also launched an XO cognac "Family reserve" whose eaux-de-vie come exclusively from the 185 hectares of the family estate. "We have felt this trend emerge since the 2008 crisis with the consumer's return to authenticity. It is a particularly strong movement among the Millenials", explains Cyril Camus.
But this inventiveness is sometimes a bit of a tease. Thus Hennessy has for the moment been refused by the administration the mention "X.X.O. Cognac Hors d'Age". "This mention is not provided for by the decree of 16 December 2016 on the labelling of spirit drinks. It could lead to deception of the consumer ", the DGCCRF fears.
How far will marketing aces go? At the cutting edge of innovation, the SME Bache Gabrielsen has launched a cognac aged in American oak barrels. An idea which has created a stir at the Interprofessional Bureau which is considering changing the appellation's regulations to specify that only French oak is allowed. A year ago at Martell, they even created Blue Swift, a 6 year old eau-de-vie whose "finishing" was done in barrels that had contained bourbon!
An initiative that has also been the subject of much discussion. On arrival, Martell was forbidden to use the appellation cognac but the mention "drink spirit". It does not matter for Martell because Blue Swift is selling well in the United States. A market in which the brand lags behind Hennessy. However, some people consider this to be certain. "The legislation distinguishes cognac from simple brandy. I am not sure that playing with the limits of legislation is the best approach to distinguish oneself", concludes Jean-François Ley.
Frank Niedercorn with Jean-Philippe Louis (Bordeaux correspondent)
Source : lesechos.fr